Palo Alto Startup Co-Founder Charged With Fraud

SAN FRANCISCO — A co-founder of Palo-Alto based tech company HeadSpin was arrested on charges of securities fraud and wire fraud, the U.S. Department of Justice announced Wednesday.

Manish Lachwani, 45, of Santa Clara County, was the company's CEO from 2015 until around May 2020. According to the DOJ, Lachwani "reported false revenue and overstated key financial metrics of the company" while the company was raising money from investors. He is accused of giving potential investors false information and creating fake invoices, among other allegations.

Lachwani faces one count of wire fraud and one count of securities fraud. If convicted of wire fraud, he faces a maximum of 20 years in prison and a $250,000 fine. If convicted of securities fraud, he faces a maximum of 20 years in prison and a $5,000,000 fine. If he is convicted of either allegation, he is required to pay restitution.